Page 15 - Union Budget, 2022

Union Budget, 2022

Set-off of Losses in Search Cases
• Where consequent to a search or a requisition or a survey, undisclosed income is being charged to tax, it
is proposed to provide that no set-off of any loss or unabsorbed depreciation against such undisclosed

income shall be allowed to the assessee under any provisions of this Act.
• Undisclosed income would refer to income in any form which has not been recorded in the books of
accounts or other documents or which has not been disclosed to the PCIT or CCIT or PCIT or CIT
before the date of search or survey. It would additionally include expenses falsely booked in the books of
accounts or other documents.
AY 2022-23 and subsequent AYs

The restriction in respect of set-off of losses and unabsorbed depreciation which was applicable to the deemed
incomes under Sections 68, 69, 69A, 69B, 69C and 69D has been now made applicable to undisclosed incomes
being disclosed consequent to search, requisition or survey, as the case may be.

Withdrawal of Certain Exemptions u/s 10
• Sec 10(8) - which provided for exemption to the income of an individual who is assigned duties in India,
in connection with any co-operative technical assistance programmes and projects. Such co-operative
technical assistance programmes and projects are required to be in accordance with an agreement entered
by the Central Government and the Government of a foreign State.
• Sec 10(8A) – which provided exemption on the remuneration or fees received by a consultant, directly or
indirectly, out of the funds made available to an international organisation (agency) under a technical
assistance grant agreement between the agency and the Government of a foreign State.
• Sec 10(8B) – which provided exemption to an individual who is the employee of the consultant as referred
to in Sec 10(8A). Such individuals are those who are assigned duties in India in connection with any
technical assistance programme and project. These technical assistance programmes and projects are
required to be in accordance with an agreement entered into by the Central Government and the agency.
• Sec 10(9) – which provided for exemption to the income of the family members of any individual or
consultant as referred to in clause (8), clause (8A) and clause (8B) supra, who accompanies such individual
or consultant to India.
• The aforesaid exemptions are provided to remuneration income (in the case of the concerned individuals
or consultants) and income accruing or arising outside India, which is not deemed to accrue or arise in
India (in the case of concerned individuals or consultant and family members), in respect of which such
assessee is required to pay any income or social security tax to the Government of that foreign State or
country of origin of such member.
AY 2023-24 and subsequent AYs

These exemptions are proposed to be withdrawn since they have outlived their utility and needed to be
withdrawn for the purpose of simplification of tax laws.

Change in Title and Inclusions to Sec 179
• Sec 179 provides that tax dues of a private company can be recovered from its directors, at the incapacity
of the company.
• It has been proposed to amend the title of this Section from ‘Liability of directors of private company in

liquidation’ to ‘Liability of directors of private company’.
• Further, any fees payable under the Act, is also included to the scope of the expression ‘tax due’ which
earlier included only penalties and interests.

AY 2023-24 and subsequent AYs

• The title is amended as the obligation of directors arises in other cases and not only when the company is
into liquidation.

• Further, the expansion of term is proposed to avoid unnecessary litigation and to provide required clarity.
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